China reduces stake in Dialog Semiconductor

November 12, 2019 //By Peter Clarke
China reduces stake in Dialog Semiconductor
China's state-controlled Tsinghua-Unigroup has disposed of shares to take its holding in Dialog Semiconductor plc below 6 percent.

Tsinghua-Unigroup is a conglomerate that is used as an instrument to implement China's industrial policy in semiconductors. Unigroup International Co. Ltd., a subsidiary of Tsinghua University, now owns 5.99 percent of Dialog, down from 6.94 percent, according to a regulatory filing.

Dialog is one of Europe's most successful fabless chip companies and was a key supplier of Apple with power management ICs. Back in December 2017 that persuaded the Tsinghua-Unigroup to take a nearly 10 percent stake in Dialog (see China raises stake in Dialog, share price jumps).

Dialog has subsequently sold a part of its PMIC operation to Apple, allowing Apple to take control of the design and manufacture of its own PMICs (see Analysis: Dialog finds a better way out from under Apple).

Nonethless, Dialog has updated its long-term financial targets to reflect an expected improvement in its business as it moves the application of mixed-signal and power management ICs out from smartphones.

The company is now aiming at revenue growth of mid-teens percentage points; underlying gross margin of 50 to 53 percent versus the previous 47 to 48 percent; R&D at 18 to 20 percent of revenue, previously at 17 to 19 percent; and an underlying operating margin at 20 to 25 percent versus 18 to 23 percent previously.

This improvement will be the result of extending its mixed-signal product portfolio in IoT, industrial, automotive and computing applications, alongside further savings in manufacturing and operational costs, Dialog said.

The company added that it has ample funds to pursue mergers and acquisitions.

Dialog announced a net profit of $68.2 million on revenue of $409 million for the 3Q19. The revenue as above the high end of guidance and 7 percent above 3Q18. At the end of 3Q19 Dialog held cash and cash equivalents of $1.17 billion.

Related links and articles:

www.dialogsemiconductor.com

News articles:

China raises stake in Dialog, share price jumps

Tsinghua Unigroup forms DRAM business unit

Analysis: Dialog finds a better way out from under Apple


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